Business Incubator

seeks to give form and substancethat is, structure and credibilityto start-up or emerging ventures. Consequently, a new business incubator is a facility for the maintenance of controlled conditions to assist in the cultivation of new companies. Business incubators are programs designed to support the successful development of entrepreneurial companies through an array of business support resources and services, developed and orchestrated by incubator management and offered both in the incubator and through its network of contacts. Incubators vary in the way they deliver their services, in their organizational structure, and in the types of clients they serve. Successful completion of a business incubation program increases the likelihood that a startup company will stay in business for the long term: older studies found 87% of incubator graduates stayed in business, in contrast to 44% of all firms.

Most common incubator service

Help with business basics Networking activities Marketing assistance High-speed Internet access Help with accounting/financial management Access to bank loans, loan funds and guarantee programs Help with presentation skills Links to higher education resources Links to strategic partners Access to angel investors or venture capital Comprehensive business training programs Advisory boards and mentors Management team identification Help with business etiquette Technology commercialization assistance Help with regulatory compliance Intellectual property management

Building support

A core group committed to starting a business incubator must recognize that its efforts cannot be pursued in a vacuum. The dream of a few must become the dream of many.
Identifying and securing stakeholders

A stakeholder is any group or individual who can affect or is affected by achievement of an organizations objectives. While each incubators circumstances are unique, anticipated stakeholders would likely include local and state governments and a variety of public and private sector organizations (universities, major corporations) interested in fostering new-business development in the region. Stakeholders might also include economic development organizations

that could fund the rehabilitation of a facility and/or the operation of the incubator program. The support of these stakeholders is critical to initiating an incubator program.
Identifying a market niche

A business incubator will operate in a particular locale with its own rich history, so it must act with an eye to the regional economy and institutions. To become an accepted part of this complex social fabric, an incubator must establish its distinctiveness and unique purpose. From a business perspective, the incubator needs to identify its market niche. Successful businesses carefully attend to the work of defining the market position of their products and services relative to their competitors, as well as to modifying their market position in response to changing customer preferences.

The Formation Process

The basic structure of an incubator facility is determined by owner attributes and regional demographics. The following owner/sponsor classifications can generally be applied:

private local government university state government private nonprofit federal government

A typical organizational format includes executive and advisory boards, a CEO or operations manager, and support staff. Selections for board positions and other representative forums may come from the following: private enterprise, educational institutions, government, organized labor, development and investment community, and private citizens. The role of the chief executive officer of the incubator is both internal and external. This person is chiefly responsible for:

incubator policy and planning marketing and recruitment tenant selection and lease negotiation facility operations management tenant service and administration

An important function is marketing the incubator, which will be driven, in part, by the results of the market analysis conducted during the feasibility study. The market analysis should consider the following major aspects of the local economy:

characteristics of large corporations in the area

level of entrepreneurial activity in the community demand for incubator-type space small-business support services by industry type, if feasible.

Business Incubators : Organizational Structure

Conclusion
Incubators have been formed to serve entrepreneurs of every ilk; they have been established by a wide variety of sponsors. It is therefore not surprising that their missions, programs, and objectives have differed substantially. Nevertheless, over the past 15 years, examples of best practices have emerged. Some general factors critical to an incubators success include:11

on-site business expertise access to financing and capitalization in-kind financial support community support entrepreneurial networks entrepreneurial education perception of success selection process for tenants ties to a university concise program milestones with clear policies and procedures